Iron ore price

The iron ore complex recovered with a 4% rise in spot prices, led by news that Brazil’s exports of the precious metal (sic) had taken a tumble, combined with another stoppage of the Simandou project in Guinea.

The iron ore complex suffered another round of selling on Monday, with the impact of closed mills and increased shipments pushing inventory higher:     Texture from Reuters: Chinese mills have idled dozens of blast furnaces as stocks piled up after domestic demand weakened, hit by covid-19 restrictions and bad weather.

The ferrous complex was hit hard on July 1, 2022: The reasons is pretty simple.

The ferrous complex faded on June 30, 2022: At issue was the Chinese PMI.

The ferrous complex surged on June 28, 2022: Enough good news out of China’s recent wins against COVID and lifting seasonal tailwinds were enough to trigger the rally.

The ferrous complex was mixed on June 27, 2022: Not very convincing price action there.

According to Bloomberg the project is going great, the Guineans not so much: What kind of world is it in which a “national champion” ravages one of the world’s poorest nations in partnership with Australia’s greatest sovereign threat in order to trash our number one export?

The ferrous market sort of bounced on Friday June 24: Futures pooped overnight with the wider market rally.

The ferrous complex was weak again on June 23, 2022: Ferrous markets and the MSM are finally catching down to the reality that’s been obvious for months: The answer to that seeming disconnect may be over-optimism in China’s steel industry, which ramped up production even as Covid-19 was hobbling the economy.

The ferrous complex stemmed the bleeding on June 21, 2022: I maintain that we have a lot of downside ahead as the global economy stalls into recession but we should note that there is a strong element of seasonality in recent moves as well.

Finally, some reality set in for the ferrous complex on June 20, 2022: The rout is being led lower by steel prices in China: I don’t think that it is unreasonable to expect a return to the 3500 range for rebar.

The ferrous complex was hammered on June 17, 2022: Early June CISA steel output fell away but is still very high: Which is holding mill inventories very high as well (I’ve adjusted this UBS chart): Where steel prices go, iron ore follows: At least, usually, that is the case.

The ferrous complex was hammered on June 16, 2022: In news, this is big: China is moving to consolidate the country’s iron ore imports through a new centrally controlled group by the end of this year, as Xi Jinping’s administration seeks to increase Beijing’s pricing power over the industry.

The ferrous complex was weak on June 15, 2022: The mystery is this. Chinese steel output is still insane, down just 3% year on year (though it is 6%+ YTD): But the main drivers of steel consumption are terrible.

The ferrous complex was weak on June 9, 2022: I noted yesterday that CISA output is at all-time highs: And noted as well that housing starts are down 40% (and more) which once fully absorbed into steel output is 160mt less steel than last year, an enormous drop.

The ferrous market was stable on June 8, 2022: According to CISA, the last ten days of May were the highest Chinese output ever: I’m baffled.

The ferrous complex launched on June 2, 2022 along with everything else: The days of iron ore operating as a discrete market free of fiancialised influences are over.

The ferrous complex was stable on June 1, 2022 though Dalian is still overheating every night: Bejing is doing its best: Beijing ordered state-owned policy banks to set up an 800 billion yuan ($120 billion) line of credit for infrastructure projects as it leans on construction to stimulate an economy battered by coronavirus lockdowns.

If you want to know how up against it the Fed is in its fight to bring commodity prices under control today then look no further than the latest from Goldman: Hoarding tees up the next leg higher.

The ferrous complex is powering again in Chinese reopening hopes: Again we saw the heavy Dalian bid overnight when Atlantic markets were open.

The ferrous complex was up on Friday May 29, 2022: Ferrous markets continue to trade correlated to broader commodity trends over fundamentals which are still getting worse.